Allied Colloids finds the formula for higher payout

ALLIED Colloids, the Bradford-based speciality chemicals group, bucked recessionary conditions last year through continued innovation, writes Gail Counsell.

Its pre-tax profits rose 5.5 per cent to pounds 44.4m on sales 15.8 per cent higher at pounds 295m, enabling the group to push dividends up by 10 per cent to 4.29p.

'The recession has squeezed margins, but sales have been very strong, up 22 per cent in the second half,' said David Ingles, a chemicals analyst at the broker James Capel.

He attributes the company's success to its continuing ability to develop and market niche chemical products that are in demand even in a recession. 'They are very good at developing new applications for their existing chemicals,' he said.

In the year ended 3 April 1993, Allied lifted capital expenditure from pounds 16.86m to pounds 21.1m, with most of the money going on new and existing plant and machinery.

Sales were higher in all product areas, but the performance of the coatings, speciality, textile and paper divisions had been particularly outstanding, said the company, which has a highly diversified product and customer base.

The shares were unchanged at 220p.